Volatility is a good thing because it makes markets move.
Volatility is a bad thing because it makes markets unpredictable.
The degree to which it does each of these often determines whether our tried-and-true trading methods enrich us, or impoverish us.
With recent geopolitical events introducing sustained high volatility into the markets, it’s easy to think that we’re smart, or that we have a winning system if we make money in a market like today’s.
Don’t fall into that trap. The introduction of volatility-induced stochastic price movement can make day-trading increasingly no more reliable than tossing a coin, no matter your trading method. Markets always enrich some at the expense of others. It’s a zero-sum game. You’ve had enough bad trading days to know what it’s like to be unlucky. So know what it’s like to be lucky. In markets like today’s, take your wins with a dose of humility. Recognize that the people whose money you took might not actually be worse traders than you are, that they might have simply been unlucky, as you have been in volatile markets in the past.
Sure, rejoice in your wins, but respect the fickle monster of volatility who favored you over others for no discernible reason.
When the world irons itself out, then we can get back to the business of strategizing, calculating, and refining our trading methods to increase our profits. But until then, all I can say is:
Good luck.
